Analysts Meet - Bharat Petroleum ... 2 Globally, we are seeing a clear shift towards adjacent non-fuel

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  • Analysts Meet – Non Fuel Initiatives

    3rd August 2016

  • 1

    No information contained herein has been verified for truthfulness completeness, accuracy, reliability or

    otherwise whatsoever by anyone. While the Company will use reasonable efforts to provide reliable

    information through this presentation, no representation or warranty (express or implied) of any nature is

    made nor is any responsibility or liability of any kind accepted by the Company or its directors or

    employees, with respect to the truthfulness, completeness, accuracy or reliability or otherwise

    whatsoever of any information, projection, representation or warranty (expressed or implied) or

    omissions in this presentation. Neither the Company nor anyone else accepts any liability whatsoever for

    any loss, howsoever, arising from use or reliance on this presentation or its contents or otherwise arising

    in connection therewith.

    This presentation may not be used, reproduced, copied, published, distributed, shared, transmitted or

    disseminated in any manner. This presentation is for information purposes only and does not constitute

    an offer, invitation, solicitation or advertisement in any jurisdiction with respect to the purchase or sale of

    any security of BPCL and no part or all of it shall form the basis of or be relied upon in connection with

    any contract, investment decision or commitment whatsoever.

    The information in this presentation is subject to change without notice, its accuracy is not guaranteed, it

    may be incomplete or condensed and it may not contain all material information concerning the Company.

    We do not have any obligation to, and do not intend to, update or otherwise revise any statements

    reflecting circumstances arising after the date of this presentation or to reflect the occurrence of

    underlying events, even if the underlying assumptions do not come to fruition.

    Disclaimer

    1

  • 2

    Globally, we are seeing a clear shift towards adjacent non-

    fuel businesses as markets evolve

    Freedom to open new fuel stations

    Retailers allowed to set their own prices

    Intensified competition among retailers due to sudden growth in # of dealers

    • New players enter

    into market

    • Relatively lower

    installation costs due

    to scale effect

    Some players lower fuel prices to attract repeat traffic • Eg. Hypermarkets

    and C&C stores with own fuel stations

    Prices fall across the board to maintain traffic except in protected areas

    Fuel business margins drop considerably • Fuel business

    margins are bare enough to break- even

    • Eg. Europe – fuel accounts for ~50% of store sales but barely covers costs; profits mostly driven by non- fuel business

    Market de- regulation

    Growth in # of fuel stations

    Downward pressure on broader fuel

    prices

    Necessity of non-fuel business

    Non-fuel business becomes a necessity for most players post deregulation

  • 3

    Several factors will drive consumption growth in India...

    Income growth

    Increasing income

    • 3X increase in avg. income

    (2010-2020)

    Growing workforce

    • 137mn more people will be

    added to the

    workforce by 2020

    Social shifts

    Urbanization

    • 40% of pop. will live in urban cities

    Nuclearisation

    • 180 mn nuclear households

    Attitudinal

    changes

    Rise of "Gen I"

    • 65 % of population

    Consumer

    confidence Index

    • 134 points, highest in the

    world

    Supply side

    growth

    Awareness

    • 500x increase in media reach

    Availability and

    access

    • 33 X increase in choice in cars

    Total Indian Market $ 2.6 Tn

    Retail : $550-600 bn (2014)  Expected to Double  $ 1.1 - $ 1.2 Tn (2020)

  • 4

    Project Nishchay

  • 5

    Rural marketplace

    Integrated fleet management

    Personal travel offering

    Urban household solutions

  • 6

    Rural marketplace

    Integrated fleet management

    Personal travel offering

    Urban household solutions

  • 7

    BPCL is in a prime position to play in rural India using three

    pillars of competitive advantage

    Physical Network

    ~3,800 ROs with a direct

    access to rural India

    ~3,100 LPG points with a direct

    access to rural India

    Brand Strength

    35%

    Average

    Competition

    31%

    BPCL

    Highest top of mind recall in

    the industry with 35%

    Highly respected brand in rural

    India

    Local Relationship Strength 1 2 3

    " Our RO dealers are typically very

    strong local opinion leaders. They

    are extremely well connected within

    the rural taluka eco-system"

    -BPCL Officer

    Strong profile of our rural RO

    dealers

    Mr. Sri Muniyappa,

    Siddleghatta

    Owns BPCL RO

    Owns 100 acres of agri

    land

    Director of local milk coop.

    "The BPCL pump stands for

    honesty and is a key landmark

    in our town"

    -Customer in Siddleghatta

    478 426

    3,786

    Total

    1,684

    Rural

    Roads

    MDR SH

    1,198

    NH

    1,242

    1,835

    3,077

    Rural LPG

    Distributor TotalLPG

    Distributors

  • 8

    Rural Market Place

    Assisted E-

    commerce

    Financial Services

    Allied Services

    Agri Advisory

    Vocational Education

    2 Wheeler Service

    Shortlisted offerings within the rural marketplace

    Multiple services have been launched at the pilot ROs…

    ..which are supported by an agri-warehousing services

    near mandis outside the RO

  • 9

  • 10

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    Kiosk based services

    Two wheeler service center

  • 12

    Rural marketplace

    Integrated fleet management

    Personal travel offering

    Urban household solutions

  • 13

    43

    44

    7

    6

    100

    0 50 100

    # trucks in fleet

    2-5

    1

    Overall

    >10

    6-10

    More than 80% trucks are

    owned by fleet owners with

  • 14

    BPCL is well poised to tap the opportunity Good starting position due to strong existing play and relationships with fleets

    H ig

    h w

    a y N

    e tw

    o rk

    C u

    s to

    m e

    r L

    o y a

    lt y

    3,799

    2,644

    132

    State highway ROs

    National highway ROs

    One stop trucker shop

    30

    52

    18

    31

    1.41.21.21.1

    0

    5

    10

    # of Fleet Owner accounts in Lakh

    +1%

    2012-

    13

    2013-

    14

    2015-

    16

    2014-

    15

    44 2

    5

    0

    5

    10

    # of Fleet cards in Lakh

    +21%

    2014-

    15

    2012-

    13

    2011-

    12

    2015-

    16

    • On ground execution of fleet card program

    • Solving real time issues of fleet owners

    • Executing ground events for SDCV/ LDCV

    customers

    Wide network on highways… …with a nationwide spread of OSTS

    Strong base of loyalty customers… …and vehicles registered

    …with relationship and experience

  • 15

    Identified Focus areas

    Freight

    Exchange

    Vehicle

    Maintenance

    Driver

    Management

    Operations

    Management

    Driver

    Services

    Offering Focus Areas

    Payment wallet &

    payment gateway

    Mechanic training

    Driver training

    Driver Verification

    Telematics device

    Cash withdrawal

    system at RO

    Telemedicine

    Finance &

    Insurance

    Working capital loan

    CV insurance

    Offering Focus Areas

    To provide end to end solution for fleet operators & shippers

    through strategic partnerships with domain experts

  • 16

    • Enhance customer base and fuel wallet share of fleet owners in emerging competitive scenario

    • Increase fuel sales & alternative revenue potential for dealers through services at RO

    • Increase lubricant visibility & sales through empanelled QSCs & FSCs

    • Increase business relationship with BPCL B2B customers by enrolling as shipper for freight exchange

    Our Aspiration

    Drive sales &

    customer

    relationship

    for core

    businesses

    ~1000

    ROs

    ~500

    kiosks

    ~400

    QSCs

    ~Top 20

    NH

    15 K+

    fleet

    customers

    ~100

    FSCs

    Fleet genie is the #1 fleet management brand delivering end-to-end solutions

    to drive greater customer engagement and loyalty in 5 years

  • 17

    Rural marketplace

    Integrated fleet management

    Persona